Subscribe to InfoChoice to receive

Special offers
Exclusive offers
Market data, trends and insights

Why are bank deposits our favourite way to invest?

Why are bank deposits our favourite way to invest?


Australians prefer to save, invest and grow their money with bank deposits. Bank deposits, including savings accounts and term deposits, are, by far, our favourite investment.

29.9 per cent of Australians say bank deposits are the best place to put savings according to the latest Westpac Melbourne Institute Index of Consumer Sentiment. That’s up slightly from 29.5 per cent in June 2016. The rising goodwill from savers towards bank deposits comes despite low interest rates, which have been cut twice in 2016.

Only 15.4 per cent of Australians prefer real estate as an investment while shares are favoured by 8.6 per cent.

But with interest rates so low, how can bank deposits pay a worthwhile return?


Bank deposits are government guaranteed

Most importantly, bank deposits up to $250,000 are guaranteed by the commonwealth government. All Australian authorised deposit taking institutions are covered by this guarantee, including the big four banks, all the other banks in Australia and as well credit unions and building societies. All institutions in the InfoChoice Term Deposit comparison tables and InfoChoice Savings Accounts comparison tables are covered by the Commonwealth Government’s Deposit Guarantee Scheme. Savers with more than $250,000 to invest, can split their money into multiple deposits with different institutions to ensure their money is fully government guaranteed in the event of the failure of a financial institution.


Getting the best rate of return on your savings

Currently the Australian inflation rate is about 1 per cent. The Reserve Bank official cash rate is 1.5 per cent. Some savings accounts and term deposits are paying more than 3 per cent per annum. Active savers are getting ahead with bank deposits.


To get the best rate on a savings account, compare current deals and look for:

1) What is the base rate?

2) What are the requirements for the bonus rate?

3) Are there any fees?

4) Do I need to link the savings account to a transaction account?


Some good deals now listed on InfoChoice include the RAMS Saver now paying a bonus rate of 3.15 per cent when you make monthly deposits of $200, and no withdrawals. ME’s Online Savings Account has a base rate of 1.3 per cent and maximum rate of 3.10 per cent when you link it to a ME Everyday Transaction Account and use PayPass/Tap&Go.


To get the best rate on a term deposit, compare current deals and look for:

1) The rate per annum and for the term

2) Do you want regular payments or interest reinvested?

3) Rollover options, bonuses?

4) What are the penalties, conditions for early withdrawal?

4) There should be no fees on your term deposit

ANZ Advance Notice Term Deposit is currently paying up to 3.20 per cent for two year terms when interest is paid annually. Gateway Credit Union Term Deposits are paying up to 3.11 per cent for one year terms.

Previous Article  Next Article

Savings Account Selector

Savings Amount

Account Type
Account Type

Featured Savings Accounts

Institution Product Max. Rate (%) Details
RaboDirect High Interest Savings Account 3.05 Go to site
Maxi Saver (2.85% variable for first 3 months) 2.85 Go to site
Maxi Saver Account (2.85% variable for first 3 months) 2.85 Go to site
Citi Online Saver (2.85% Variable intro rate for 4 months on balances up to $500k) 2.85 Go to site
Maxi Saver (NSW, ACT, SA & NT) (2.85% variable for first 3 months) 2.85 Go to site
Maxi Saver (QLD, VIC, WA & TAS) (2.85% variable for first 3 months) 2.85 Go to site
Institution Product Max. Rate (%) Details

Based on promotional or introductory rates for an online savings account of $5,000. For information on how we've selected these “Sponsored” and “Featured” products click here.


Find out more

Twitter Facebook

© InfoChoice Pty Ltd ABN 93 061 105 735 AFSL and Australian Credit Licence number 349445

Although we cover a range of products, providers and services we don't cover every product, provider or service available in the market. The information and products contained on this website do not constitute recommendations or suggestions to purchase or apply for any particular product. Products included on this site may not suit your personal objectives, financial situation or needs. Please consider whether it is appropriate for your circumstances, before making a decision to purchase or apply for any product. If you are considering acquiring any financial product you should obtain and read the relevant Product Disclosure Statement or other offer document prior to making an investment decision.

Go to top